Young people reaching financial independence at 25

The average age young people believe they are or will be financially independent is now 25, according to new research from Legal & General.

This figure is seven years more than the average age parents of 18-27 year olds claim they became financially independent. 

Legal & General surveyed over 1,000 working 18-27 year olds, those most likely to be making a fresh start in life by starting a new job and moving into new accommodation.

The research highlighted that, on average, young people are leaving the family home at the age of 22 and nearly a fifth (16 per cent) are enjoying the benefit of being able to own their own home.

Despite the expense of moving out and the rising cost of living, the report encouragingly found that eight out of ten young people claim they are completely independent of financial support from their family and friends.

However, 15 per cent said they are not yet financially independent don't anticipate being so until their 30s or even later.

On average, young people believe they need to earn slightly over £18,000 a year to be financially independent. This salary level is just under the average annual salary of those surveyed which was £19,600, so it appears many are only just managing to scrape by. 

The research reveals that nearly half of those surveyed (44 per cent) find it stressful managing their finances and two-fifths (41 per cent) say the worst thing about working life is the long hours.

According to the study, over a third of people (36 per cent) are earning less money than they thought they would in their current job showing how financial independence comes at a price, with many having to make sacrifices they would rather not make.

More people taking work where they can find it

Confronted with a difficult job market, two-fifths of people (40 per cent) said they had jobs already lined up before leaving education. However, those who did not took an average over six months to find employment after leaving education.

This could explain why over half of respondents (58 per cent) admit to being in their current job primarily so they had money coming in and haven't yet decided on a long-term career. A similar number of people (52 per cent) have taken jobs where they see earning a regular income as more important than overall job satisfaction, with 43 per cent working in a job that they do not enjoy.

Parents becoming concerned

As a result of young people working harder and longer, parents are concerned about the impact this is having on their children as well as what the future holds for them. The research revealed that four out of five parents (80 per cent) think it was harder for their children's generation to find a job compared with their own experiences. 

More than two-fifths of parents (43 per cent) worry their children do not have enough savings to support themselves if they lost their job and almost half (46 per cent) worry that they will never be able to get on the property ladder.

This research shows young people are still relying on their parents for financial support and if they cannot get access to this support it is likely they will find themselves in debt as they may not earn enough money to make ends meet.

By James Francis